Top 10 Benefits of Travel Credit Cards

Some of you may be saying to yourself: I only do minimal or no travel during the year. Therefore, I don’t need a travel credit card. Similarly, there is an annual fee and the credit card company should be paying me to use their cards and not vice versa. It’s totally understandable to have these thoughts but I say be open minded since there are so many advantages of having a credit card. Here are my Top 10 Benefits of Travel Credit Cards:

First, conquer your fear of annual fees. Yes, there are annual fees on some credit cards. In fact, two of the best credit cards I have include a high annual fee but it is so WORTH it. For example, the Chase Sapphire Reserve and the Marriott Bonvoy credit cards each have $450 annual fee. However, both cards offer a $300 credit which makes the effective annual fee $150. For Chase Sapphire Reserve, the $300 credit can be applied towards travel such as uber or taxi rides, hotels, etc. Likewise, the Marriott Bonvoy credit can be applied towards Marriott brand hotel stays or food/drinks in their hotel bar. Furthermore, the $150 fee can be offset by the Global Entry credit worth $100 and Priority Pass worth hundreds for the year.

For those of you who are wondering what a Global Entry and Priority Pass are: Global Entry is having pre-check and also access to the quicker line for immigration and customs when you’re coming to the U.S. from an international trip. On the other hand, Priority Pass is having access to a lounge or restaurant while you’re waiting for your flight in the airport. This includes free food and drinks in the lounges or restaurant credit. As a result of these benefits, the annual fee is essentially zero. The points you earned for purchases are for you to spend on your next destination. Isn’t that exciting?

Second, credit cards offer significant bonus points. Most credit cards offer bonus points when you open the card. The bonus points depend on the credit card but it is typically between 40,000 to 60,000 points. However, these points may be deceiving as some points are worth more than others. I recommend checking out The Points Guy monthly valuation to determine the value of the points. For example, if you get the Chase Sapphire Preferred credit card and meet the minimum spend, you will receive at least $625 worth of points for travel or $500 in cash.

Third, credit cards offer travel protection. Most credit cards offer great travel protection such as getting refunded due to sickness or severe weather. You will also get travel delays and lost luggage reimbursement, etc. Most credit cards also offer rental car insurance or medical help if there’s emergency that occur during your travel. Read the fine print of the credit card you are wanting to apply as these benefits could result in significant savings.

Fourth, take advantage of the no interest for 12 months or more. Some credit cards offer no interest for a year or more for a small fee. This is such an enticing benefit if you have a credit card balance on a card where you are paying a high interest rate.

Fifth, using travel points may be cheaper than using cash. For most credit cards, it’s beneficial to use the travel points which could be worth 1.25 or 1.50 points than getting a cash back. For example, 10,000 points is worth $125 on Chase Sapphire Preferred , $150 on Chase Sapphire Reserve or $100 cash back. Personally, I’d rather use the points on travel and get the higher value, $150.

Sixth, earn enough points and your next trip will be FREE. I suggest setting a travel goal to make it easier to plan for your next trip. If you don’t have a travel goal, that’s OK too. My recommendation is to go to the airlines you want to fly to your travel destination. From there, search how many points you need by clicking on “Redeem Miles” or “Use Miles” option. This will indicate how many points or miles you need to earn and the taxes and fees. Also, it will indicate if there’s even availability on the time period you’re interested in. Note that some credit cards like the Chase United Explorer offer certain award availability to card members only. I love having more options!

My advice when you want to book using points is to be flexible on the dates. This is especially important when you have limited points and want to use it for the cheapest seat. Those seats are typically taken first. Additionally, your points could be used for hotels or convert to cash in order to pay for the taxes/fees. Basically, leaving you with zero cost for your next travel.

Seventh, credit cards offer no foreign transaction fees. If you travel outside of the U.S., the no foreign transaction fee can save you money like the World of Hyatt credit card. When I wasn’t aware of the foreign transaction fees, I used to pay the fee when I traveled to the Philippines years ago. For me, this is one of the great benefits of having a credit card especially when you travel internationally.

Eighth, use the credit card offers to reduce your bill. Most credit cards including Chase Southwest credit card offer a statement credit. This credit appears if you purchase from a particular store in a specified time frame. For instance, I’ve seen TurboTax, Hurley, Starbucks, Rubios, Lulus, etc. It ranges from a certain percentage off or an amount. It’s definitely great to have these credits especially when if you have a credit card that has no annual fee like the AMEX Hilton. In essence, you are getting extra cash in your pocket.

Ninth, credit cards have better fraud protection than debit cards. Credit card companies have saved me by crediting me back any fraudulent charges on my credit cards. It’s an easy process since they typically just reverse the transaction after you explain the situation to them. Usually, they flag it before I even realize someone has been using my card fraudulently. As for debit cards, it typically has less protection, more documentation to justify you didn’t make the charges. Hence, I just opt to use my credit card 100% of the time if cash is not required.

Lastly, even if you have minimal travel or no travel, earning the points is worth it. If you try the cards with no annual fee like the AMEX Hilton, earning hotel points is still greater than no points. If you’re only using your debit card, you are letting go of money you could be earning on your regular purchases. Use your card to pay for your cable, phone, or gym charges monthly. These points will start to add up for that FREE hotel or airline points.

Overall, don’t be afraid of the annual fees or the convenience of just having one debit card. Opening up credit cards could just be a solution to get your dream vacation. Give it a try! Pick the credit card that waives the annual fee on the first year and see if you like it. It never hurts to earn even a few hundred dollars from the bonus points!

Do you have a credit card strategy to maximize your points? Tell me your suggestions in the comment below. If you’re interested in reading more about credit cards, check out my post about Best Travel Credit Cards for 2019. 

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